Professional Documents
Culture Documents
1 INTRODUCTION
The modern companies, due to their vast size, use vast societal
resources. It is therefore imperative that these resources are used
by Board of Directors for the best interest of not only the
shareholders but other stakeholders as well. The Board therefore
must have the freedom to take executive decisions but such
freedom must be exercised within the framework of
accountability.1
1
Taxmann’s Company Law, Kapoor G.K., 20 th edn.
2
www.economicsdiscussion.net
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CH.2 CORPORATE GOVERNANCE
3
https://www.investopedia.com/terms/c/corporategovernance.asp
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DEFINITIONS OF CORPORATE GOVERNANCE
4
http://www.yourarticlelibrary.com/business/corporate-governance-
business/corporate-governance-in-india-concept-needs-and-principles/69978
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other stakeholders such as employees, suppliers, customers and
local community.”
5
https://www.investopedia.com/terms/c/corporategovernance.asp
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CH.3 NEED FOR CORPORATE GOVERNANCE
Corporate scams (or frauds) in the recent years of the past have
shaken public confidence in corporate management. The event of
Harshad Mehta scandal, which is perhaps, one biggest scandal, is
in the heart and mind of all, connected with corporate shareholding
or otherwise being educated and socially conscious.
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The need for corporate governance is, then, imperative for reviving
investors’ confidence in the corporate sector towards the economic
development of society.
5. Hostile Take-Overs:
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7. Globalisation:
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CH.4 PRINCIPLES OF CORPORATE GOVERNACE
Transparency:
Accountability:
Independence:
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management of the company being independent; good corporate
governance is only a mere dream.
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CH.5 IMPORTANCE (CG)
It has been noticed in India that companies raised capital from the
market at high valuation of their shares by projecting wrong
picture of the company’s performance and profitability.
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Corporate governance is considered as an important
means for paying heed to investor’s grievances.
Though some measures have been taken by SEBI and RBI but
much more required to be taken by the companies themselves to
pay heed to the investor grievances and protection of their
investment by adopting good standards of corporate governance.
Global Perspective
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governance and flows of foreign investment has become
increasingly important.
Studies in India and abroad show that foreign investors take notice
of well- managed companies and respond positively to them,
capital flows from foreign institutional investors (FII) for
investment in the capital market and foreign direct investment
(FDI) in joint ventures with Indian corporate companies will be
coming if they are convinced about the implementation of basic
principles of good corporate governance.
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In India, insider trading has been rampant and therefore it was
prohibited by SEBI. However, the experience shows prohibiting
insider trading by law is not the effective way of dealing with the
problem of insider trading because legal process of providing
punishment is a lengthy process and conviction rate is very low.
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www.economicsdiscussion.net
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CH.6 CONCLUSION
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CH.7 SUGGESTIONS
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BIBLIOGRAPHY
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